E-Commerce
E-commerce refers to all forms of business activities conducted across the internet. This can include E-tailing, B2B, intranets and extranets, online advertising (e.g.. advertising banners), and simply online presences of any form that are used for some type of communication (customer service for example). (Definition cited from http://www.learnthat.com). E-commerce has several advantages and disadvantages at present. Some of its advantages include larger markets, no taxes, no dealing with traffic on the road or rude sales men, wide range to explore before buying or selling. On the other hand, some of its disadvantages are that you can’t “feel” the product before buying, there is a question of security and a question of reliability on the buyer/seller. This being said, there are a lot of deeper issues affecting e-commerce at present that might be preventing it from growing. For example, all online stores at present are struggling to build their return policies such that it doesnt drive customers away. According to BizRate, 85% of online customers agree that the inability to receive credit on a credit or debit card, might refrain a customer from shopping online
E-commerce refers to all forms of business activities conducted across the internet. This can include E-tailing, B2B, intranets and extranets, online advertising (e.g.. advertising banners), and simply online presences of any form that are used for some type of communication (customer service for example). (Definition cited from http://www.learnthat.com). E-commerce has several advantages and disadvantages at present. Some of its advantages include larger markets, no taxes, no dealing with traffic on the road or rude sales men, wide range to explore before buying or selling. On the other hand, some of its disadvantages are that you can’t “feel” the product before buying, there is a question of security and a question of reliability on the buyer/seller. This being said, there are a lot of deeper issues affecting e-commerce at present that might be preventing it from growing. For example, all online stores at present are struggling to build their return policies such that it doesnt drive customers away. According to BizRate, 85% of online customers agree that the inability to receive credit on a credit or debit card, might refrain a customer from shopping online
Secondly, some aspects of e-commerce attract a lot of people to shop online. For example, online customer service has proven to be very appealing to customers. And finally, some ground-breaking technologies have been developed such as Verifi, DigiScent and TouchSense that have some really exciting capabilities. These technologies will be explained in the fourth paragraph. E-commerce has grown rapidly over the past couple of years. In 1998, e-commerce contributed $18 billion to the economy, whereas in 2002, this number grew to $294 billion (http://mason.gmu.edu/~gmalloy/stat.html). Even though e-commerce is growing rapidly, it is still in its childhood, like the internet once was, and a lot of obstacles need to be overcome and a lot of advancements made before e-commerce can be as widespread and as successful as the internet.
Present Challenges Facing E-Commerce
Speaking of obstacles, there are a lot of them that need to be uprooted before e-commerce can compete with traditional commerce. The biggest obstacle in the course of advancement of e-commerce is that the consumer's senses are limited to seeing and hearing the product. This factor is the most important factor that has hindered the growth of e-commerce to a large extent and has prevented it from competing with traditional commerce, in which there are no sensory limitations for the consumer. The second largest problem that e-commerce has been facing over the past few years is that of security. Traditional buyers and sellers are still paranoid about conducting business online. According to Hal Loevy, vice president of Global Marketing and Partnerships for SGSonSITE, "Despite all the noise about e-commerce, which is significant, companies still have to keep their old business practices: Can I trust who I am buying from? Who am I doing business with? What is their trading history? Am I obeying the law? Will I receive the goods as specified on screen and who do I approach if I have a problem?". According to emarketer.com, "70% of US consumers are concerned about online security; this discourages consumers from using credit cards to shop online (PaymentOne)". Also according to e-marketer.com, in December 2001, 91% of websites collected personal information and in April-May 2001, 68% of US internet users were concerned that transactions may not be secure and other companies and individuals might gain access to their personal information. Considering all these statistics on security, there is no question that e-commerce has to remedy this in order to advance. According to Hal Loevy, one solution to this problem of security is making some basic standards for doing business on the internet. His company, for example SGS, has recently formed a Forum for Trust in Online Trade. This company provides a blue, silver or gold seal to e-companies depending on how much it trusts the company. If they provide a gold seal to company, they are saying that they take full responsibility for transactions with that company. This company has 30,000 employees worldwide. Another institution that is concerned with sercurity online is the Federal Trade Comission. "In addition to taking action against companies suspected of engaging in unfair business practices, the FTC has worked to shape Internet policy in a range of areas, including online disputes and resolutions, Internet-based fraud and privacy concerns". This institution however, has only 1100 employees, about 70% of them in Washington D.C
. Advatages
Looking at the brighter side
however, e-commerce obviously has numerous advantages over traditional commerce, the number one advantage being convenience of use. The user can browse online stores, compare prices and order merchandise sitting at home on their PC. This provides considerable advantages over traditional commerce such as no taxes, no dealing with salesmen and access to a large market and a wide range of products without getting out of your comfortable chair. Apart from these obvious advantages, e-commerce also provides some other specific features, which gives it an edge over traditional commerce. One such feature is online customer service. According to Forrester, 37 percent of online consumers use customer service more from Web retailers than traditional retailers because of its potential for ease of use and quick response times. These consumers also appreciate the ability to seek customer service from their homes. The preferred method for consumers to resolve their customer service issues is e-mail, Forrester found, with the telephone the favorite best method. Web shoppers excpect customer service on each step of the way, therefore having a good infrastructure for customer service can certainly help the company in succeeding. "Once excellent proactive customer service is in place, merchants must build their brands around the promise of a satisfying experience," said Forrester's Christopher Kelley. "This means not only advertising a call center but also bragging about speedy response times and knowledgeable service reps". Dell, for example has adopted the same approach to selling their products both online and offline. They have an excellent website (http://www.dell.com), that provides the customers with each and every small detail that they need to know in order to make a purchase. E-commerce and commerce over telephone, are the main reasons for the companies success today. One reason why the company is so successful today is that they do not make their products until they receive orders, therefore there is usually a shipping time of 10-12 days depending on the customers location. This however, has proven beneficial for the company, since it helped them cut down on warehousing costs. One way in which the company has encouraged online ordering is by offering rebates on the products that are bought online. Other companies should follow Dell's example if they want to succeed in the online world.
Present Challenges Facing E-Commerce
Speaking of obstacles, there are a lot of them that need to be uprooted before e-commerce can compete with traditional commerce. The biggest obstacle in the course of advancement of e-commerce is that the consumer's senses are limited to seeing and hearing the product. This factor is the most important factor that has hindered the growth of e-commerce to a large extent and has prevented it from competing with traditional commerce, in which there are no sensory limitations for the consumer. The second largest problem that e-commerce has been facing over the past few years is that of security. Traditional buyers and sellers are still paranoid about conducting business online. According to Hal Loevy, vice president of Global Marketing and Partnerships for SGSonSITE, "Despite all the noise about e-commerce, which is significant, companies still have to keep their old business practices: Can I trust who I am buying from? Who am I doing business with? What is their trading history? Am I obeying the law? Will I receive the goods as specified on screen and who do I approach if I have a problem?". According to emarketer.com, "70% of US consumers are concerned about online security; this discourages consumers from using credit cards to shop online (PaymentOne)". Also according to e-marketer.com, in December 2001, 91% of websites collected personal information and in April-May 2001, 68% of US internet users were concerned that transactions may not be secure and other companies and individuals might gain access to their personal information. Considering all these statistics on security, there is no question that e-commerce has to remedy this in order to advance. According to Hal Loevy, one solution to this problem of security is making some basic standards for doing business on the internet. His company, for example SGS, has recently formed a Forum for Trust in Online Trade. This company provides a blue, silver or gold seal to e-companies depending on how much it trusts the company. If they provide a gold seal to company, they are saying that they take full responsibility for transactions with that company. This company has 30,000 employees worldwide. Another institution that is concerned with sercurity online is the Federal Trade Comission. "In addition to taking action against companies suspected of engaging in unfair business practices, the FTC has worked to shape Internet policy in a range of areas, including online disputes and resolutions, Internet-based fraud and privacy concerns". This institution however, has only 1100 employees, about 70% of them in Washington D.C
. Advatages
Looking at the brighter side
however, e-commerce obviously has numerous advantages over traditional commerce, the number one advantage being convenience of use. The user can browse online stores, compare prices and order merchandise sitting at home on their PC. This provides considerable advantages over traditional commerce such as no taxes, no dealing with salesmen and access to a large market and a wide range of products without getting out of your comfortable chair. Apart from these obvious advantages, e-commerce also provides some other specific features, which gives it an edge over traditional commerce. One such feature is online customer service. According to Forrester, 37 percent of online consumers use customer service more from Web retailers than traditional retailers because of its potential for ease of use and quick response times. These consumers also appreciate the ability to seek customer service from their homes. The preferred method for consumers to resolve their customer service issues is e-mail, Forrester found, with the telephone the favorite best method. Web shoppers excpect customer service on each step of the way, therefore having a good infrastructure for customer service can certainly help the company in succeeding. "Once excellent proactive customer service is in place, merchants must build their brands around the promise of a satisfying experience," said Forrester's Christopher Kelley. "This means not only advertising a call center but also bragging about speedy response times and knowledgeable service reps". Dell, for example has adopted the same approach to selling their products both online and offline. They have an excellent website (http://www.dell.com), that provides the customers with each and every small detail that they need to know in order to make a purchase. E-commerce and commerce over telephone, are the main reasons for the companies success today. One reason why the company is so successful today is that they do not make their products until they receive orders, therefore there is usually a shipping time of 10-12 days depending on the customers location. This however, has proven beneficial for the company, since it helped them cut down on warehousing costs. One way in which the company has encouraged online ordering is by offering rebates on the products that are bought online. Other companies should follow Dell's example if they want to succeed in the online world.
Some recent technological breakthroughs
Finally, in order to make the online shopping experience even more better, there are a lot of new technologies like Verifi, DigiScent's iSmell and TouchSense that have emerged over the last couple of years. Even though iSmell and TouchSense are very new technologies and they haven't been adopted by the majority of internet shoppers yet, they promise a consumer-friendly future. Verifi is one technology that has been widely adopted today, and for good reason. According to a recent BizRate study, over 50% of online shoppers stated that they would not make further purchases from a Web merchant that delivered an item in a colour that wasn't what they expected. This is the problem that Imation have designed their Verifi system to solve. Here's how it works. When a shopper visits a Verifi-enabled Web site for the first time they are invited to take a Web based survey that establishes how their monitor, computer, operating system and browser handle colour. This information in then stored as a cookie in the shopper's browser. Then, when they view a product image, the Verifi system reads the information in the cookie and combines this with the profile of the scanner (or digital camera etc.) that the merchant used to produce the image to generate a colour-accurate image in the shopper's browser. To conclude, e-commerce is still at a very young stage. In order to advance, the obstacles such as credit card acceptability, vulnerability of data misuse and sensory limitations need to be overcome. Also technological advancements need to be made, in order for e-commerce to progress. If these steps are taken, commerce on the web will eventually become as popular as traditional commerce.
Finally, in order to make the online shopping experience even more better, there are a lot of new technologies like Verifi, DigiScent's iSmell and TouchSense that have emerged over the last couple of years. Even though iSmell and TouchSense are very new technologies and they haven't been adopted by the majority of internet shoppers yet, they promise a consumer-friendly future. Verifi is one technology that has been widely adopted today, and for good reason. According to a recent BizRate study, over 50% of online shoppers stated that they would not make further purchases from a Web merchant that delivered an item in a colour that wasn't what they expected. This is the problem that Imation have designed their Verifi system to solve. Here's how it works. When a shopper visits a Verifi-enabled Web site for the first time they are invited to take a Web based survey that establishes how their monitor, computer, operating system and browser handle colour. This information in then stored as a cookie in the shopper's browser. Then, when they view a product image, the Verifi system reads the information in the cookie and combines this with the profile of the scanner (or digital camera etc.) that the merchant used to produce the image to generate a colour-accurate image in the shopper's browser. To conclude, e-commerce is still at a very young stage. In order to advance, the obstacles such as credit card acceptability, vulnerability of data misuse and sensory limitations need to be overcome. Also technological advancements need to be made, in order for e-commerce to progress. If these steps are taken, commerce on the web will eventually become as popular as traditional commerce.
